Rupiah sets weaker tone for Asian monies

Rupiah sets weaker tone for Asian monies

HONG KONG (Dow Jones): Several bomb blasts in the Indonesian
city of Medan were the catalyst for sharp losses in the rupiah
Monday, setting a modestly weaker tone for most other Asian
regional currencies.

Some dealers said the explosions are nothing new, that other,
deeper political issues are really behind the rupiah's troubles,
and that the explosions were merely a readymade excuse to buy
dollars. "It's just an indication of the fact that the market
doesn't have the (U.S. dollar) positions it needs," said a dealer
with a U.S. firm.

After reaching its intraday low of Rp 8,667 per dollar, the
local currency closed down at Rp 8,570 on Monday as compared to
Rp 8,495 last Friday.

David Simmonds, currency strategist with Citibank, said of the
bomb blasts to some extent mimics the effect of similar
explosions in the Philippines. It seems the market's reasoning is
that "it happened (there) and effected the peso, so therefore it
can effect the Indonesian rupiah," he said.

The trader said there have been "offers" to sell U.S. dollars
on the way up coming from a few investment banks. But said
demand, from both local and offshore sources has been persistent
through much of the day.

Elsewhere, the Philippines peso bucked the market trend and
edged up in a show of stability after recent heavy losses. The
U.S. dollar is quoted at 42.70 pesos, down from 42.72 pesos.

The U.S. unit's upturn against the peso in recent sessions was
a bit "overdone", said Simmonds, "and so we saw a bit of (USD)
selling on the spot side." But he added that 42.50-60 pesos will
provide a solid base for the U.S. dollar, and said a move up to
43.00 pesos could be in the works.

Foreign bank traders said arrests over the weekend of suspects
in the Manila shopping mall bombings may have helped underpin the
peso this session.

The Korean won, meanwhile, is holding just about unchanged in
late dealings, with the U.S. dollar trading at 1,136.80 won,
compared with 1,136.50 won late Friday.

But the U.S. currency got up to 1,140.00 won in the early
going on worries about the extent of the Hyundai Group's
financial troubles after the Korea Exchange Bank said Friday it
had extended 50 billion won in credit each to Hyundai Engineering
& Construction Co. and Hyundai Merchant Marine Co.

That's helped to renew concerns about the whole issue of
short-term debt servicing at the major Korean chaebol, said
Simmonds, and adds to a series of factors that have undermined
the currency in recent weeks.

In Thai baht trading, meanwhile, dealers said dealings were
thin and direction derived from the rupiah. The U.S. dollar was
quoted slightly higher at 39.175 baht, up from 39.07 baht late
Friday. The dealer with the U.S. bank said the currency is
rangebound.

Standard & Poor's MMS International said in a report Monday,
meanwhile, that Moody's may upgrade Thailand's credit rating.
Moody's is reviewing the country's credit rating, and will send a
team to Thailand Tuesday and Wednesday.

The Singapore dollar was also weighed down a bit this session
by regional concerns, although only slightly. The U.S. dollar is
quoted at S$1.7335, up from S$1.7318.

The new Taiwan dollar is trading at NT$30.84, up from
NT$30.808.